The governor’s proposed state budget could mean a record loss of nearly $4 billion for Los Angeles County, putting hundreds of thousands of needy residents at risk of losing welfare checks, in-home care, health care and other services, officials said.

“It’s very stressful for us when we hear the state budget has a $20 billion shortfall,” said Gloria Molina, the chairwoman of the Board of Supervisors. “We know there is going to be an awful lot of cuts made for many of our services … That is terrifying to all of us.”

Under Gov. Arnold Schwarzenegger’s proposed budget, Molina said, nearly 400,000 county welfare recipients could lose a total of $1 billion in benefits.

The Department of Public Social Services, which administers the CalWORKS welfare program, could lose an additional $577 million that pays for administrative, child care and other services to low-income people.

Molina said fewer people would qualify for health benefits under Schwarzenegger’s plan to cut $254 million in Medi-Cal funds.

The county stands to lose nearly $2 billion in state revenues – or 9 percent of the county’s $23.6 billion budget. That doesn’t include the

$2 billion the state pays 135,000 In-Home Supportive Services workers in L.A. County, said Phillip Browning, director of the Department of Public Social Services.

In comparison, the county lost $426 million in state revenues over the past two years and recently loaned the state $360 million in property-tax revenue.

Instead of raising taxes further or cutting the benefits of poor people, Supervisor Michael Antonovich said the state should trim its bloated, highly paid work force.

From 1997 to 2007, the number of state workers grew 24 percent from 719,000 to nearly 900,000. In 2003, only eight state employees earned more than $200,000 a year. Last year, nearly 1,000 state employees earned more than $200,000.

“When the governor was first elected, he had a group of 250 top people review the state budget and they came up with a 2,500-page, $34 billion way of saving money at the state,” Antonovich said. “And they promptly took that proposal and they put it in the trash can. We didn’t follow through with any of those structural reforms, and as a result we are now facing a

$20 billion deficit affecting every city, county and school in this state.”

If Schwarzenegger’s budget is approved by the Legislature, officials say the cuts would dwarf the ones during the county’s last serious fiscal crisis in the mid-1990s. The county then had a shortfall of more than $650 million but avoided bankruptcy through an infusion of federal funds, layoffs and cuts in services.

But despite Schwarzenegger’s “doomsday scenario budget,” budget experts note the governor made similar proposals last year, but those were blocked by legal challenges and state lawmakers. And even under the governor’s proposal, the plan to eliminate CalWORKS, IHSS and Healthy Families would only occur if the federal government refuses to provide the state with the $6.9 billion the governor has requested.

County CEO Bill Fujioka said he has asked departments to prepare to make up to 9 percent cuts in the fiscal year that begins July 1. That’s on top of 5 percent in cuts last year and 3 percent in cuts the year before.